39 Tips to Reduce Your Costs and Improve Your Profits

We all need to manage inventory and stock costs, and expenses.

You have to make decisions, manage time and resources, and know how to run your Pharmacy like a streamline profit machine.

To reduce your costs, maximise your profits and improve the return on your business investment, you must focus on measuring profitability against costs, expenses, and efficiency.

To help you here are 39 great tips:

1. Religiously use your POS to manage, control, and balance your inventory.

2. Make your business distinctive and carry some lines your competitors don't have.

3. Price stock at what the customer is willing to spend, not on what it costs.

4. Price everything at ..95 or ...45. Dont just price using cost plus ...%.

5. Make a budget and follow a detailed open-to-buy plan to eliminate over buying.

6. Seek out manufacturers to purchase stock at below wholesale prices.

7. Test different aspects to promote business: New offers, New items, New prices.

8. Identify supplier performance regarding sales, mark-up, turnover, and profits.

9. Don't accept deliveries you can't use, or that arrive after the specified completion dates.

10. Use sales forecasts, expense sheets, and financial statements on regular basis.

11. Computerise, more than just POS, your business to streamline everyday tasks and business procedures.

12. Develop a tracking and reporting system for those products that are your best and worst-sellers.

13. Buy closer to the busy season for a particular product - to minimise the risk of making a bad buy

14. Attend trade shows and join buying groups to find better values.

Reduce Costs

15. Seek suggestions from suppliers on ways you can boost business.

16. Use a store questionnaire to help you in determining customers' wants and needs.

17. Negotiate with your suppliers to obtain better prices, terms and faster deliveries.

18. Ask your suppliers to share in paying freight costs.

19. Inquire whether your suppliers will help with co-op advertising.

20. Consider adding private label merchandise to establish better margins.

21. Create an initial pricing strategy for special value and off-price products.

22. Evaluate your Buying and expenses on a regular basis.

23. Establish a flexible buying plan that allows for special in-season purchases.

24. Replace fringe, non-compelling, and borderline stock.

25. Use toll-free telephone numbers for reorders and communication with suppliers.

26. Develop a timely markdown strategy to dispose of out-of-season stock.

27. Avoid shortages of your most popular and profitable categories and lines.

28. Implement a reorder strategy for your best-selling items.

29. Promptly return substandard and problem stock.

30. Ask for invoice extensions and take trade discounts allowed for timely payments.

31. Specify delivery and completion deadlines for all initial orders and future reorders.

32. Display merchandise to make it easier for customers to see, feel, touch, and buy.

33. Look for new opportunities to increase prices on items your competitors don't carry.

34. Insist on credits or adjustments for late deliveries and substituted orders.

35. Bargain for exclusive rights and products that will not be sold to the competition.

36. Ask for markdown money for excessive or unreasonable in-season selling losses.

37. Eliminate excessive stock in slow- moving and unprofitable categories.

38. Adjust your stock on hand with estimated sales projections and customers' needs.

39. Pay attention to your monthly overhead and business expenses ratios.

By managing your business more effectively, you'll be able to provide better values, attract more customers, improve your average sales transaction, and offer customers new opportunities to visit your store, all while making better profits.

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